PARIS — France and Italy are officially pushing together for exempting strategic investments from EU spending rules.
French President Emmanuel Macron and Italian Prime Minister Mario Draghi on Thursday urged the EU to allow countries to spend more when it comes to key investments.
“We need to have more room for manoeuvre and enough key spending for the future and to ensure our sovereignty,” Draghi and Macron wrote in an op-ed published Thursday in the Financial Times.
“Just as the rules could not be allowed to stand in the way of our response to the pandemic, so they should not prevent us from making all necessary investments,” the two leaders wrote, while noting that “debt raised to finance such investments, which undeniably benefit the welfare of future generations and long-term growth, should be favoured by the fiscal rules, given that public spending of this sort actually contributes to debt sustainability over the long run.”
The European Commission this year launched a review of the so-called Stability and Growth Pact and will be consulting stakeholders until the end of the year, before presenting a proposal. Fiscal rules are currently on ice amid the coronavirus pandemic, but the EU is getting ready to reintroduce them from the start of 2023.
In the past, France repeatedly made clear that new fiscal rules should take into account the need to invest more in key strategic sectors and in the green and digital transitions, and that they should be adapted to the particular situation of each member country.
Germany is, however, less keen on loosening the rules, with new Chancellor Olaf Scholz stressing that current ones are proving to be flexible enough during a visit to Rome earlier this week. A group of countries led by Austria has also pushed back against the changes Macron and Draghi are defending.
The leaders hope that the debate won’t be “clouded by ideology” and that a “shared” approach can be found during the first half of 2022, under France’s rotating presidency of the Council of the EU. They also said that the system used to control spending and reforms under the EU’s recovery plan could serve as “a useful blueprint” for future spending.
Over the past months, Paris and Rome have increased their ties in several policy areas and sealed their newfound friendship with a bilateral treaty last month.
